- Mon. - Thurs. : 9:00am - 6:00pm, Fri. : 9:00 - 5:00pm ET
A Budget is a monthly plan that requires you to allocate money to categories of spending or saving.
Trinity Debt Management Services
This is the pay you take home, after taxes. If married, list both you and your spouse’s. Include full-time as well as part-time jobs, Social Security or disability payments. List any other sources of income. If you don’t have a consistent in-come, review your paystubs from the previous year. Figure out what you earned and divide it by 12. That will give you an average of what you earn every month.
List your “fixed” expenses, costs that stay the same each month such as your rent or mortgage, car payments and insurance premiums. Next, list the expenses that vary from month to month, such as entertainment, recreation and clothing. Anticipate periodic costs that aren’t billed every month, such as home maintenance or li-cense tag renewals and fill in those columns as needed when they pertain to that particular month. It’s important to identify necessary expenses first, then prioritize the rest.
Minimum payments should be made on everything. Any money going toward retirement plans should temporarily stop until your debt is paid off. Any money left over in the budget should be assigned to saving $1,000. This is your emergency fund. Save this as quickly as possible. If you can only save it gradually, put aside any money that’s left over from your budget each month. After saving for your emergency fund, paying down debt becomes your priority. Call Trinity and talk to a counselor about addressing your credit card debt by consolidating your accounts into one lower monthly payment and reducing interest rates.
After all debt is paid-in-full, saving 3-6 months of living expenses becomes your emergency fund goal. Every dollar needs to be accounted for in your budget. Your income minus expenses should equal 0. This is a zero based budget.
You’ll need to adjust you budget monthly, because things change. Some months you’ll have a holiday, vacation or birthday. Think ahead and prepare for those expenses. Don’t be unprepared by letting those occasions sneak up on you. A budget is not meant to complicate your life. It is a great financial tool if you make it achievable and realistic. When you begin seeing what money is coming in and going out, it will make your life easier. Too strict of a plan that is overly tight is unrealistic. If you don’t allow some flexibility, your plan will fail. You may have not budgeted enough for some areas and too much for others. It will take a few adjustments to reach a realistic level. You should review your plan monthly and make the changes necessary before the next month begins. A good plan changes as your life changes.
There’s no underestimating the importance of formulating a budget. It’s a process that helps you develop the self-discipline needed, to manage your money and keep needs, wants and desires in their proper alignment. A spending plan ultimately forces you and your family to develop disciplined attitudes about earning, saving and living within your means.
There are lots of online budget websites and phone apps available to help you manage your money. Many of them are free! Use budget tools like- EveryDollar, Monefy, Goodbudget, Mint or Money Manager, some of which offer visual guides. Budget Tracker is another tool but is a bit more old-school in style. There’s even a kids section to help them understand how budgeting works.
If you prefer spreadsheets, there are several free budget templates available from Microsoft and Google Sheets. There are also lots of free budgeting worksheets available online. Several free computer software programs, like Microsoft Excel and BudgetPulse, offer materials as well. Trinity offers several budget work-sheets as well.
One low-tech way to help with your budget is to use the Envelope System. Financial expert Dave Ramsey helped popularize the method. With this system, cash is used for things you pay for in person that require you to pull out some form of payment. You may be used to using a credit card, but from now on cash is recommended. Once you’ve created your budget, cash is intentionally taken out at the beginning of each month and organized in envelopes amongst categories like food, clothing and entertainment. Don’t buy anything else with the cash, other than what you’ve designated the money for in that envelope. When money in a particular envelope is gone, no more spending should occur until there is more cash put in.
Whether we’re helping people pay off their unsecured debt or offering assistance to those behind in their mortgage payments, Trinity has the knowledge and resources to make a difference. Our intention is to help people become debt-free, and most importantly, remain debt-free for keeps!
Trinity Debt Management is not a lender and does not lend money.
© Copyright 2021 Trinity Debt Management. All Rights Reserved.
